Semiconductor Industry Association Says U.S. Could Lose Race for Nanotechnology Leadership; U.S. Standard of Living, National Security Linked to Leadership

WASHINGTON --(Business Wire)-- March 16, 2005 -- The coming transition to nano-scale semiconductor devices means that leadership in information technology is up for grabs, warned the Semiconductor Industry Association (SIA).

At a news conference in Washington, D.C., today chief executives of U.S. semiconductor makers and a leading economist stressed the importance of continued progress and leadership in semiconductor technology. The industry is observing the 40th anniversary of Moore's Law -- an observation made in 1965 by industry pioneer Gordon Moore that the number of components on a computer chip was doubling approximately every 12 months with a commensurate reduction in costs. Following the vision of Moore's Law, the U.S. semiconductor industry has led the worldwide industry, contributing key innovations that have helped drive America's economic growth.

Speaking at the news conference were Steve Appleton, chief executive officer of Micron Technology and 2005 chairman of the SIA; Craig Barrett, chief executive officer of Intel Corporation; Dale Jorgenson, Samuel W. Morris University Professor at Harvard University; and George Scalise, president of the SIA. The industry executives noted that four decades of continuous advances in microchip technology have led to creation of entirely new industries, including personal computers, the Internet, and cellular telephones, while enabling major advances in biotechnology, medicine, and environmental protection. Professor Jorgenson discussed the contributions semiconductors have made to economic growth and productivity gains during the past decade.

SIA called for stepped up support for basic research in the physical sciences to assure continued U.S. technology leadership. Experts believe current semiconductor technology could run up against physical, technological, and economic limits around 2020.

"U.S. leadership in technology is under assault," said Barrett. "The challenge we face is global in nature and broader in scope than any we have faced in the past. The initial step in responding to this challenge is that America must decide to compete. If we don't compete and win, there will be very serious consequences for our standard of living and national security in the future."

Barrett said that industry scientists believe current CMOS scaling to support Moore's Law can remain in effect for at least another 10 to 15 years. When the smallest features on a chip shrink to less than 10 nanometers -- 10 one-billionths of a meter -- current chipmaking technology will reach its ultimate limits. To keep Moore's Law alive, the industry will have to leave Newtonian physics behind and transition to the realm of quantum physics -- the era of nanotechnology.

"U.S. leadership in the nanoelectronics era is not guaranteed," noted Barrett. "It will take a massive, coordinated U.S. research effort involving academia, industry, and state and federal governments to ensure that America continues to be the world leader in information technology."

Semiconductor Technology Vital to U.S. Economy

Sustaining continuous advances in semiconductor technology is vital to sustaining improved U.S. economic performance, according to one of the nation's leading economists, Professor Dale Jorgenson. "The mantra of the 'new economy' -- faster, better, cheaper -- characterizes the speed of technological change and product improvement in semiconductors, the key enabling technology," said Jorgenson. "Development and deployment of information technology is the foundation of the American growth resurgence that has occurred since 1995.

"The economics of information technology begins with the precipitous and continuing fall in semiconductor prices," Jorgenson continued. "The rapid price decline has been transmitted to the prices of a range of products that rely heavily on this technology, like computers and telecommunications equipment." Jorgenson noted that swiftly falling prices for information technology equipment have provided powerful economic incentives for rapid diffusion of information technology, which in turn has led to accelerated economic growth and strong increases in productivity.

"The four IT-producing industries -- semiconductors, computers, communications equipment, and software -- are responsible for a quarter of the growth resurgence, but only 3 percent of U.S. gross domestic product," said Jorgenson. "Obviously, the impact of the IT-producing industries is far out of proportion to their relatively small size."

SIA Chairman Steve Appleton called for a concerted national effort to increase the resources devoted to research and development in the physical sciences. "Our current efforts are inadequate," said Appleton. "Federal funding for R&D as a percentage of U.S. gross domestic product has been almost cut in half over the past 20 years. We must return to the investment levels of the mid-1980s in order to compete for leadership."

SIA leaders will be calling on legislative and executive branch leaders to support increasing research budgets for the physical sciences in the National Science Foundation (NSF), the National Institute for Standards and Technology (NIST), and the Department of Defense. Specifically, the SIA is calling for:

-- Increases of 7 percent per year in the research budget of the NSF for 10 years, doubling the research budget over that period;

-- An appropriation of $20 million to match the semiconductor industry's support for the Focus Center Research Program, which supports pre-competitive research on microelectronics technology at 30 universities to ensure continued U.S. leadership throughout the remaining years of the CMOS era;

-- An increase of $20 million to enhance the nanomanufacturing and nanometrology research capabilities of NIST; and

-- An increase in funding for the Math and Science Partnership program of the No Child Left Behind act.

"U.S. leadership in technology is not inevitable," said Appleton. "Leadership in information technology is a cornerstone of our national strategy for economic growth, an improving standard of living, and national security. The actions we take today to ensure continued U.S. leadership will determine the quality of life enjoyed by our children and grandchildren," Appleton concluded.

About SIA

The SIA is the leading voice for the semiconductor industry and has represented U.S. semiconductor companies since 1977. Collectively, the chip industry employs a domestic workforce of 255,000 people. More information about the SIA can be found at www.sia-online.org.